Car loans and car insurance with a Ch 13

[njguy1972]

I read the back of my monthly auto payment bill and it says I need to contact them if I declare bankruptcy.

I have 2 years of payments left at .9%. I am current and never missed a payment. Do I need to fear that they will be able to raise my interest rate after I alert them to the bankruptcy? I saw an article about 11 USC 365 which says contracts cannot be changed but I am sure these finance companies are smart and have a provision in the contract about adjusting the interest rate if a payment is missed or if the borrowers credit score changes to the negative during the length of the agreement.

Also, many auto insurance companies check credit reports. Has anyone experienced their auto insurance rates rise steeply after filing?

Just trying to be prepared for anything that may occur as I go through this process.

My toughest conversation will be with my manager at work since I work for a financial company and the employee handbook states employees must alert their manager and compliance if they are a party to a lawsuit or bankruptcy. I could choose not to tell them but then I would be subject to termination if they were to find out. They do run background checks on employees from time to time.

[EricaCallaha]

We had a decent rate on our Explorer that we included in our bankruptcy. The attorney originally had listed 7% as the percentage that Ford would get. I alerted them to the fact that our original rate was only 3.9% and how could they get more interest in the bankruptcy than what we actually owe? He said that they can't and was adjusted back down to the original rate. Hopefully your district works the same way.

We changed auto insurance right after our 341 meeting and actually received a very competitive rate. I was shocked how little your credit comes into play with certain insurance companies. They also run a different kind of credit check than banks do. I am only aware of this as our new agent is a friend of ours and this was a concern that I had when he was quoting us for new policies.

Good for you to getting prepared. There is nothing worse than trying to go through this process like it is a fire drill. Good luck at work. Hopefully it will not impact your employment status.

Good luck...

[Flamingo]

If your state allows insurance credit profiling, there is always a risk of your rates rising due to filing; however, if your state does not allow insurance credit profiling and your rates rise and you believe it may be due to your credit rating, contact your State Department of Insurance and have it investigated. Our state eliminated insurance credit profiling last year and rates cannot be raised for state residents with any insurance company that does business in our state based on credit rating. Your State Department of Insurance can tell you whether or not your state allows the practice.

Also usually if you are with your insurance company for a long period of time and do not have many claims, you should just see the general increases each year instead of a big jump as you have established yourself as a long-term, low risk customer so that works in your favor.

As to your employment worries; comply with what is stated in your handbook - that is a common clause usually for those in management and up positions. You risk termination unless you are upfront about your filing.

[bksmith12345]

I read the back of my monthly auto payment bill and it says I need to contact them if I declare bankruptcy.

I have 2 years of payments left at .9%. I am current and never missed a payment. Do I need to fear that they will be able to raise my interest rate after I alert them to the bankruptcy? I saw an article about 11 USC 365 which says contracts cannot be changed but I am sure these finance companies are smart and have a provision in the contract about adjusting the interest rate if a payment is missed or if the borrowers credit score changes to the negative during the length of the agreement.

Also, many auto insurance companies check credit reports. Has anyone experienced their auto insurance rates rise steeply after filing?

Just trying to be prepared for anything that may occur as I go through this process.

My toughest conversation will be with my manager at work since I work for a financial company and the employee handbook states employees must alert their manager and compliance if they are a party to a lawsuit or bankruptcy. I could choose not to tell them but then I would be subject to termination if they were to find out. They do run background checks on employees from time to time.

I have been in the auto business here in NJ for over 15 years. And, at least in NJ, there is no way in the world they can increase your interest. They can assess late fees or add car insurance if they find out you don't have any. That is it. As long as you pay that is all its about. Your 0.9% will stay that until the end of the loan.